African urbanisation 'offers new opportunities for development'

20 June 2016

The way Africa’s major cities are developed will hold the key to the continent’s future growth, a major study has said.

The African Economic Outlook 2016, by the African Development Bank, the OECD Development Centre and UN Development Group, said Africa’s rapid urban population increase is unprecedented.

However, it needs to be accompanied by infrastructure development if this increase is to be an engine of growth, the report warned.

With the number of people living in cities doubling between 1995 and 2015 to 472m, the continent is in the midst of a major demographic shift, unlike what other regions such as Asia have experienced.

Infrastructure development has not kept pace with the population growth. Two-thirds of the investments in urban infrastructure that will be required before 2050 have yet to be made, the study said.

“The scope is large for new, wide-ranging urban policies to turn African cities and towns into engines of growth and sustainable development for the continent as a whole,” said the report. “If harnessed by adequate policies, urbanisation can help advance economic development through higher agricultural productivity, industrialisation, services stimulated by the growth of the middle class and foreign direct investment in urban corridors.”

Urban development policies can lead to better housing and social safety nets, the report said.

Such policies can also mitigate the effects of climate change and scarcity of water and other natural resources by developing clean, cost-efficient public transportation systems, improving waste collection and increasing access to energy.

“Africa’s ongoing, multi-faceted urban transition and the densification it produces offer new opportunities for improving economic and social development while protecting the environment in a holistic manner,” said Mario Pezzini, director of the OECD Development Centre.

“The benefits could accrue for both urban and rural dwellers, provided governments adopt an integrated approach,” he added.

The report recommends increasing investment in urban infrastructure, improving connectivity with rural areas, clarifying land rights, managing the growth of intermediary cities (smaller cities that connect rural and urban areas) and improving the provision of infrastructure and services within and between cities.

In 2015 Africa was the second fastest growing economic region after East Asia. The report forecasts the continent’s average growth to be 3.7% in 2016, rising to 4.5% in 2017, assuming a strengthening world economy and recovering commodity prices.

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